Oil fell below $70 per barrel on Wednesday, extending its losses concerns over an impending recession and sustained banking instability continue to hamper market sentiment.
Crude futures fell in New York to their lowest levels since March, while banking stocks including PacWest Bancorp and Western Alliance Bancorp declined during premarket trading on Wednesday.
Ongoing concerns about the likelihood of a recession in the near future are also expected to influence the Federal Reserve’s next interest rate decision, with policymakers set to convene on Wednesday for a two-day policy meeting.
Currently, a 25 basis point hike is expected, however, the Fed is expected to announce an interest rate pause in its following meeting as the labor market cools down and inflation continues to subside gradually.
“Despite contagion spreading across the regional bank space, we expect the Fed to squeeze in a final 25 basis point hike before pausing to assess the impact of the significant and rapid tightening to date,” Mizuho strategists Evelyne Gomez-Liechti and Helen Rodriguez told investors in a note.
